Sally sells second-hand furniture at a price set always at 20% above cost. The year-end Trial Balance of her business appears as stated. She did not take a year-end inventory but reports that she has taken for her own use inventory costing £7,000 and has given free to her old school’s library furniture costing £15,000.

Required:

(a) Prepare a Statement of income for the year ended 30 September 2011, and

(b) a Statement of financial position as at that date.

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Inventory 1.10.2010 Staff salary Sales Rent Purchases Non-current assets Cash and bank Capital Drawings £'000 £'000 228 34 48 688 180 12 10 1,200 I 900 - 300 - 1,200